HR Support for Multi-State Employees

With the Covid-19 outbreak, multi-state employment has become the new trend of hiring remote workers. Companies find it convenient to hire remote employees from cities, states, and countries other than where the headquarters office is located. However, multi-state employment companies now find that there are basic compliance issues they need to worry about.

The society of human resources management (SHRM) data indicates that up to 50 percent of U.S workers, that’s half of them – prefer to work from home if they have the opportunity. In comparison, more than 70 percent of workers want flexible work options to remain available, according to a Work Trend Index survey.

Why Hire Multi-State Employees?

One of the benefits of hiring employees from several locations – states and countries – is that employers can have access to diversity; more talent is available to pick from, depending on what H.R. is looking for. But basically, remote work companies are not limited by a dearth of relevant professionals.

This new shift in employment trend accounts for why more and more organizations are switching to remote employment. So regardless of the physical location of a business, we can all agree that remote work has become a permanent feature of the global economy.

However, every company working remotely is required to develop an appropriate plan, policy, and strategy that factors in the inherent challenges of hiring remote teams.

Impact of Hiring Multi-State Remote Employees

When companies have employees working from multi-states, it generates a lot of concern and complexities, both for the worker and the organization. There are a number of pros and cons to remote work that come into account.

For instance, there are always issues of legality to look at, and your company must ensure compliance. All ends of your business must be tied up concerning federal, state, local, and international laws. That is why you need sound H.R. support for multi-state employees.

Multi-State HR Compliance Policy for Remote Workers

A company looking to hire multi-state remote employees enjoys the privilege of having a large pool of talent from diverse backgrounds to choose from. The employment process is also flexible, and a team of remote workers drawn from diverse locations can boost a company’s profile, reputation, and profit.

However, there are factors to be taken into account when you hire multi-state remote employees; clear regulations that organizations working remotely should comply with. If your company’s H.R. compliance with multi-state employment guidelines is lacking, it can present legal issues for your business.

Ideally, no matter how big or small their operational structure is, companies should ensure compliance with legal requirements concerning remote work policies.

Ensuring H.R. Compliance for Multi-State Employment Companies Employee

The task of keeping abreast with multi-state compliance regulations can be quite challenging for H.R. departments of organizations. However, non-compliance should not be an option, as the legal implication can be very costly.

Thankfully, a number of states in the U.S. have helpful resources on compliance, just as there are blogs communicating helpful tips and resources that companies can get helpful tips from. Also, the best payroll services online have this ability.

Multi-State Compliance and Multistate Employer Issues to Look Out for

H.R. compliance is not all that straightforward; there are just too many levels of checks and regulations that employers have to deal with. Oftentimes, there may be points of clash or variance between existing state and federal laws. Businesses have to wade through this type of atmosphere without running afoul of any specific laws.

In essence, compliance with multi-state employment regulations may require your H.R. to develop a viable yet flexible employment policy that can sync easily with various sections of laws obtainable in multi-states.

There are several platforms online where you can find multi-state employer resources to help you resolve the challenges of having workers located across states. As we’ve reiterated, companies looking to be compliant with multi-state laws and regulations should put in place relevant H.R. policies and structures to support the process.

A good approach is to build a comprehensive database with a list and profile of your remote team located in other states. This will help your company to keep a tab of employees’ employment status and location, just in case anything comes up sometime in the future.

You can also research the local laws and regulations obtainable in the states where your workers live. While you’re at this, do ensure you’re keeping tabs on policies applicable in states where your main business offices are located.

Below, we’ll explore several aspects of multi-state compliance aspects that your business should consider in order to avoid fines:

Minimum Wage for Multi-state Employees

This is an important consideration for remote employees. Adhering to minimum wage laws of the state and the federal government is another subject of contention for multi-state employers. States across the U.S. have different minimum wage laws, ranging from about $7 to $15.

California currently pays the highest minimum wage state-wide in the U.S. ($15 per hour), while Seattle pays the highest minimum wage city-wide in the U.S. ($17.27). Many other states pegged their minimum wage between $13 and $14 per hour, and there are several other states that have yet to fix a minimum wage at all. This makes for a very complicated subject, and companies hiring multi-state employees have to find a way around it.

State Income Tax Withholding

As we all know, the issue of tax is a fundamental part of businesses. However, legal provisions allow for multi-state employers to withhold income tax for multiple states from the salaries of their employees. In most cases, withholding such tax is for the specific state the services were carried out.

Although that is the basic requirement, it does not apply in instances where states already have outstanding laws indicating that residents are expected to only remit income tax to the states where they live instead of where they work.

As we said initially, the issue of H.R. compliance and tax withholding for multi-state employees can be knotty subjects. It is the onus of the H.R. department of a business organization to be up-to-date with states’ tax income laws to find out which states within the U.S. are reciprocal states. This will ensure that there’s no breach of legal provisions each step of the way.

It is required by law that businesses that hire multi-state employees must be registered with the states and their state tax agencies. This is aimed at proper handling of employment taxes. In some cases, it would be required for your remote company to be registered as a foreign organization in the remote states where you carry out your business.

Deductions from Wages

According to the Fair Labor Standard Act (FLSA), there are general minimum standards regarding what can and cannot be deducted from an employee’s wage. This is to suggest that it can sometimes be required and necessary, even allowed legally, for employers to deduct certain amounts from the wages of their employees.

However, the FLSA clarifies that an employer in a state that prohibits the deduction of an employee’s wage for any reason has to comply with that state’s peculiar law. Simply put, as a remote employment company, your human resource office must be clear about deductions from employees’ wages. If your state permits it, great; if not, it’s in your best interest to comply.

Salary Exempt Levels

The exempt threshold for many U.S. states is above the federal exempt threshold, and it has a direct bearing on the state’s minimum wage. In a state like California, for instance, employees are to receive twice the state minimum wage per hour, based on a 40-hour week, before they can be considered exempt.

Typically, remote companies with 26 or more employees are required to pay up to $1,200 per week at a minimum before they can qualify for an exemption. This is different for employers with less than 26 remote employees; they have to pay up to $1,120 weekly to qualify for the exemption.

Final Pay for Remote Employees

According to the requirements of the law, remote employers may not give a final paycheck to the former immediately, even though the company is expected to pay former employees their final salary. However, much of this is dependent on whether or not the employment was terminated by the company or it was a voluntary resignation.

The law is different for each state, but the principles are not all that different. Basically, some states in the U.S. dictate that employers are mandated to pay the final salary within seven days to a worker who resigns, while the employer is mandated to make final payment to the employee immediately in a case where the contract was terminated by the company.

There are other compliance-related issues around final pay, which the H.R. department will do will to research and be abreast with as they relate to multi-state employment.

Overtime Services Considerations and help for Remote Employees

There are specific rules when it comes to how businesses are supposed to handle the subject of overtime. The U.S. Department of Labor ascertains that any work performed over 40 hours in a work week is overtime. But there are various overtime laws and considerations for different states in the U.S.

Usually, overtime pay is calculated per day; some states indicate that daily work exceeding 8 hours per day should be paid overtime for each extra hour, while some other states define overtime to be from 10 hours per day. It all depends on each state.

Discrimination Laws for Multi-State Workers

The subject of discrimination is always a sensitive area, no matter which side of the table you’re looking at it from. It’s a scourge that’s as old as humans; people have always been discriminated against for various reasons.

With regards to the corporate world, discrimination laws have been put in place by many states and even the Federal Government. Each state where they have discrimination laws is unique and tailored for its particular situation and history.

For example, in some U.S. states like Colorado, New York, and California, companies are not permitted to include questions in employment forms that require details of a candidate’s salary history or criminal records.

There are also areas in law-making reference to sexual harassment and religious beliefs. Questions inquiring about the sexual orientation (straight, gay, bisexual, etc.) of a prospective employee are deemed inappropriate and have been removed from employment forms of many organizations.

Employee Benefits Leaves for remote employees

Remote employees are also entitled to their leave. The Family and Medical Leave Act (FMLA) suggestion are 12 weeks of unpaid leave for employees under certain conditions. This applies to companies with a workforce of 50 and above under a 75-mile radius.

Technically, the remote worker under a multi-state employer is covered and is entitled to a leave period since his actual location could be hundreds of miles away from the main office. However, that employee may or may not be eligible for other forms of work leave in the state in which they reside, depending on the terms for eligibility in those states and or the discretion of the employer.

In contrast, an employee who works for a company at a small location with less than 50 workers may not be qualified for FMLA, even though he or she is eligible for state leave under the ADA. This is assuming there are enough workers available who qualify for FMLA.

Again, it is essential for employers to be cognizant of the provisions of state and federal leave laws concerning employee leave eligibility, the nature and coverage of the leave (paid or unpaid), and how long the leave is expected to last.

Managing Risks of having Multi-State Employers Resources

When it comes to the remote work industry and hiring multi-state employees, you can’t rule out certain risks involved. A time of conflict between employer and employee may arise, or between employer and a state where his remote teams work. That is why having a competent legal team and a qualified H.R. department is important.

Here’s a tip, if you hire remote workers, have a competent lawyer in tow, even if there’s no fire on the roof yet. That’s how to be proactive in business. A good lawyer can always give you a heads-up to prevent issues that may arise for your business in the future.

There are also competent H.R. services with a firm grasp of the remote industry. They have resources online and blog posts on the subject, offering insightful tips that help companies avoid the sharks in the water. If you’re going into a new service in a remote location or your company is moving into a new state, you need to be sure it’s a good move.

That’s why you have your legal team and your H.R. it’s their job and responsibility to ensure that your business stands on the good side of the law always when it comes to your compliance policies.

Get a Competent H.R. Partner for Multi-State Compliance

One of the best things you can do for your business at this point is to get a competent H.R. service partner to take care of your multi-state compliance issues. You can either have this in-house, or you can use a professional H.R. Service Company in remote locations to ensure that you have your compliance issues sorted.

Sometimes, even if you have your own H.R. department in your company, it helps if you still have verified H.R. experts or service companies in states where your remote teams are working out from. Unless you have just one state of worrying about, it can be quite daunting when you have your remote employees stationed across various states and cities, and your in-house H.R. has to regularly interface with them. It can be overwhelming.

To help with this, there are a number of professional H.R. services available that you can talk to about your multi-state compliance concerns. They can help you sort out the clutter and give you focus and the possibility of handling other aspects of your business. That is the basis of everything we’ve addressed so far. Without your compliance policy in place and well-defined, it’s unlikely that your business will get very far.

Of course, employees are expected to be subject to the laws of the state where they live and work. This is the core idea of multi-state compliance; simply adhering to the basic laws and regulations obtained in the state where you have remote workers. It’s that simple!

It would be foolhardy to run a business service in a city or state, you have workers there, and yet you do everything to contravene the laws of the place by your business policy and corporate behavior. It’s been said already; if you’re in Rome, behave like the Romans.